I don't think I'd pay down the mortgage, if it were me. Especially if its low rate (I thought I read in one of the follow ups that its at 5%).

Saving only 5% in a 401k and 5% in a Roth wouldn't allow ME to make it to retirement comfortably. Have you calculated how much you will need to comfortably retire? Do you know about when you want to retire? Are the 5% contributions you are planning for adequate to achieve this?

If it were ME, I'd sit down and figure out just how much retire (and college, too) will cost. Then I'd fund in this order:

1) Contribute enough to the 401k to get the match2) Contribute enough to max out both you and wife's Roths3) If you need to save more to reach your retirement goals, then do so via your 401k4) Fund 529 plans for the girls

Only AFTER your retirement goals are funded should you think about funding the 529 plans. They can get scholarships for college, but you have to fund your own retirement plans. And remember, its okay to make sacrifices. Like if you want to retire 5 years later so you CAN fund the 529's, then that's fine too. Just make sure you understand the sacrifices and are okay with it.

An ditto on the disability suggestion for your wife. Don't forget about life insurance for her as well. If she dies, you'd have the added expense of child care.

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!

When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.

Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.